Exhibit 17-1 -According to Those Who Favor a Passive Approach to Policy

question 127

Multiple Choice

Exhibit 17-1
-According to those who favor a passive approach to policy, how will the economy shown in Exhibit 17-1 attain equilibrium at potential output?

• A)The SRAS curve will shift to the left.
• B)Real wages will fall shifting the SRAS curve to the right.
• C)Either the money supply or government spending should be increased.
• D)Either the money supply or government spending should be decreased.
• E)Aggregate demand should be decreased.

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Definitions:

Private Carrier

A company or individual that offers transportation services not to the general public but under specific contracts or agreements.

Reasonable Care

The degree of caution and concern an ordinarily prudent and rational person would use in similar circumstances.

Parcel

A piece of land, property, or object that is to be delivered or considered as a unit.

Free Parking

A space or area where vehicles can be parked without charge, often found in public areas or as part of commercial or residential properties.